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NNPC Plans To Repair Three Refineries With N152bn

NNPC Plans To Repair Three Refineries With N152bn

The  Nigerian National Petroleum Corporation will spend  N152bn on the repair of  three of the nation’s  refineries in 2013.

The  amount is contained in the budget document submitted to the National Assembly Joint Committee on Petroleum (Downstream) last week.

Details of the budget show that the total maintenance cost for the Port Harcourt Refinery  by its original builders,  basic engineering design for the Fluid Catalytic Cracking Unit and RFCC plant project  is  estimated at N76.779bn.

A  breakdown of the N76.779bn  indicates that  N43.5bn will be spent on  the refinery’s  rehabilitation, N32.646bn  on the plant project and N636m on basic engineering design.

The total estimated expenditure for the maintenance of the Warri  Refining and Petrochemical Company  is put at N43.12bn.

The NNPC is planning to spend N41.879bn on  the refinery’s  rehabilitation; N159m on  fire detection alarm systems; N286.2m  on replacement of the HP BFW Pumps and Driver 101-P-02B;  and N79.5m  on the  upgrade of the co-boiler instrumentation and burner management system.

The corporation will spend  N32.106bn on the Kaduna Refining and Petrochemical Company. The breakdown  of the N32.106bn   shows that N31.441bn will  go into its rehabilitation and  N317.38m  for  the  reconstruction of FCCU, gasoline tank (51TK14B) and purchase of accessories.

Rehabilitation of raw water intake road will gulp N178.12m,  while new maintenance office building will cost  N170m.

The corporation, in 2012, budgeted  N154.48bn for capital expenditure, but spent N23.1bn only.

In the  budget statement, which was obtained by our correspondent on Monday, the NNPC   said  that the Federal Government had yet to pay it N217bn kerosene subsidy.

It added  that  non-payment of the claims was  hindering the execution of its capital projects.

The corporation  stated “Budget performance is hampered by lack of funding resulting from non-payment of kerosene subsidy (N217bn) and other outstanding claims from the Federal Government.”

The NNPC  also  plans to move  42.3 milion barrels of crude oil to the domestic refineries for processing in 2013.

As a result,  a total of 18.64 billion litres of products are expected to be derived from local refining during the period.

The document says the corporation  is optimistic about ensuring 100 per cent  products evacuation from the refineries, including reducing operational and demurrage costs by 10 per cent each on the 2012 levels.

NNPC also promised to achieve a 10 per cent growth in internally-generated revenue in 2013.

On projections for the refineries, the corporation said it intended to “transform the refineries into stand alone profitable business units; continue integrity type maintenance project; build capabilities and improve on refinery operation and continue to utilise alternative crude supply routes to the refineries as a secondary supply strategy.”

The National Assembly had queried the NNPC for spending more than it earned in 2012. It consequently  requested details from where it got the extra money to fund its  activities.

The corporation had said it had a total receipt of N2.36tn by the end of September 2012, but had an operational expenditure of N2.84tn.

The Minister of Petroluem Resources, Mrs. Diezani Alison-Madueke, had in October said that the Federal Government planned to spend N250bn  on the Turn-Around Maintenance of the Port Harcourt, Warri and Kaduna refineries.

She said the government would spend $146m  out of which $32m (75 per cent) had already been paid for the materials needed.

Several TAMs had been performed on  the refineries in the past without visible results.

A newspaper had in November 2011 reported that  $1.78bn was spent on TAMs of the  four refineries in the last  12  years.

Quoting  the NNPC  Annual Statistical Bulletin for 2010, it stated that the Kaduna refinery operated at 31.39 per cent capacity utilisation in 2001; 34.95 per cent in 2002;  15.96 per cent in 2003;  26 per cent in 2004;  33.08 per cent in 2005; 8.34 per cent in 2006; 0.00 per cent in 2007;  19.56 per cent in 2008; 20.02 per cent in 2009;  and 20.46 per cent in 2010.

The Port Harcourt refinery  performed at 60.73 per cent in 2001;  52.17 per cent in 2002; 41.88 per cent in 2003;  31.04 per cent in 2004;  42.18 per cent in 2005; 50.26 per cent in 2006;  24.87 per cent in 2007;  17.84 per cent in 2008;  9.08 per cent in 2009;  and 9.17 per cent in 2010.

The Warri  refinery operated at 48.29 per cent in 2001; 55.53 per cent in 2002; 14.27 per cent in 2003;  9.10 per cent in 2004; 54.85 per cent in 2005;  3.85 per cent in 2006;  0.00 per cent  in 2007;  38.52 per cent in 2008;  43.01 per cent in 2009;  and 43.36 per cent in 2010.

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